Incorporating multi-core x86 CPU technology and graphics processing technology from ATI into a computer chip about &frac14; the size of a stamp, the Fusion APU will provide netbooks the ability to play DirectX 11 games and Blu-ray video while delivering battery life for more than 10 hours on idle power and around five hours of power when in active use.

During the chip’s launch yesterday at the Ontario Science Centre, Ben Bar-Haim, general manager of AMD Canada said the Fusion will be narrowly targeted at ultra thin laptops and netbooks, but he expects the processor to appear on tablets and other devices later in Q1 of this year.

“Fusion technology represents a major advancement in processor technology that will open up exciting new experiences for consumers,” Bar-Haim said.

The Fusion APU is similar to Intel’s Sandy Bridge processors in that it combines a CPU and a graphics processing unit (GPU) in a single die. However, AMD’s new processor is not meant to go head-to-head against Sandy Bridge processors which are meant for mainstream and performance laptops.

Fusion APU has two lines: The 18 watts E-series (codenamed Zacate) which includes a 1.6 GHz E-350 dual core processor and 1.5GHz E-240 single core processor; and the 9 watts C-series (codenamed Ontario) which includes both a 1.0 GHz C-50 dual core and 1.2 GHz C-30 single core processor.

Zacate chips are designed for mainstream laptops as well as all-in-one and small form factor desktops. The Ontario chips is meant for “emerging form factors” such as netbooks, tablets and embedded markets, said Bar-Haim

“The timing of AMD’s release is very interesting,” according to technology analyst Michelle Warren, principal of MW Research and Consulting in Toronto.

She noted that many surveys report that the tablet market is on the rise and that the touch-screen devices are slated to overshadow the netbook market in 2011. “But this new development will provide a leg up for netbooks and make them more viable business tools.”

Warren explained that the two chief drawbacks of netbooks are battery life and meager computing power. She said Fusion’s low power consumption and improved video rendering capability will address these shortcomings.

“Better video rendering capabilities sound like consumer features but they have business and productivity implications. This means netbooks can now have more power to resource intensive business apps such as SAP business intelligence tools,” said Warren.

Tim Brunt, lead analyst for the IDC Canadian Quarterly PC Tracker program, however thinks not even the Fusion APU will be able to save the netbook market.

“Netbooks are not going to disappear, but our numbers show that their sales are going down fast. In the States, they’re giving away netbooks for $99 each,” he said.

On the other hand, he said, IDC surveys indicate a growing interest in tablet devices.

New desktop, notebooks and netbooks based on AMD Fusion processors are now available from Acer, Asus, Dell, Fujitsu, HP, Lenovo, MSI, Samsung, Sony and Toshiba, according to AMD.